Saturday, June 5, 2010

What is Resolution 17?

Resolution 17 (PDF) would compensate AFM musicians displaced by musical acts from foreign countries playing in the United States and Canada. It would allocate AFM's visa processing fee income to the Music Performance Fund (MPF).

What are visa processing fees?

When a tour promoter hires a foreign musical act to play in the United States, it must arrange for each foreign musician's temporary work visa. As part of the visa application, the promoter pays AFM a visa processing fee — $200 for standard delivery, $250 for expedited delivery. In exchange, AFM provides a boilerplate "no-objection" letter to the tour promoter (examples: PDF). Although AFM hid these fees under "other income" until 2007, we now know that AFM has collected over $3.6 million since 2004.

What is the Music Performance Fund (MPF)?

As recording technology became readily available in the 1940s, thousands of venues which used to host live music began playing recordings. For example, in the days before radio stations simply played back recorded music, radio stations actually hired musicians. Tens of thousands of musicians were displaced by this effect.

The AFM, through a hard-fought strike, wrestled a settlement from the recording industry in 1948 to pay into a special, independent trust fund — the MPF — to compensate musicians for this displacement. Since then, MPF has paid musicians over a billion dollars for live, admission-free concerts across the United States and Canada, often co-sponsored by local businesses and governments.

Today, MPF funding has dried up due to years of negligence by AFM's administration. During new contract negotiations, AFM offers to exclude MPF payments without even being asked — see, for example, this AFM proposal for digital downloads (PDF): "There shall be no MPTF contribution on digital downloads."

Unless we take action, according to MPF's impartial trustee, John Hall, "it's only a matter of what month the doors would be shut."

How do musical acts from foreign countries displace AFM musicians?

Tour promoters have discovered that they can keep more profits if they hire cheap, foreign "sweatshop orchestras" instead of professional AFM musicians. Because all markets for live music are finite, a dollar spent on a foreign sweatshop orchestra is a dollar not earned by AFM musicians. This is displacement. The following examples are not anecdotes; they are recent, well-documented instances of AFM musicians losing work to unfair competition from foreign musical acts.

A recent exposé by the New York Times of the Moscow State Radio Symphony Orchestra detailed a nationwide, specific example of displacement. Tour promoters are eager to cash in on the hunger for live classical music programming in smaller cities and towns around the country. But they do so on the cheap when they can, in this case by hiring a foreign sweatshop orchestra which pays musicians $40 a concert.

If your city is on this map, a sweatshop orchestra displaced AFM musicians in a venue near you (click to enlarge).

Music Worcester, a promoter of live classical music in Worcester, MA, routinely fills its entire season with orchestras similar to the Moscow State Radio Symphony Orchestra, and has done so for several years. Prior to the availability of sweatshop orchestras, Music Worcester hired the Worcester Symphony Orchestra (comprised of AFM musicians) to perform these seasons.

Displacement is not limited to low-profile tours, promoters, towns and cities. In 2009, Star Wars In Concert was promoted as a nationwide event, with some of AFM's best musicians from New York, Philadelphia and Boston engaged for the first six weeks of the tour. However, after six weeks, the promoter switched to foreign musicians — a group billed as the Royal Philharmonic Concert Orchestra — to play the remainder of the fourteen week tour. AFM's musicians were so clearly superior that the tour's producer engaged them for the full 2010 tour. However, highly achieved AFM musicians were displaced in 2009.

This Royal Philharmonic Concert Orchestra, reassembled as forty-eight background players was then engaged for Sting's 2010 Symphonicity Tour. Sting opened with this group of foreign musicians in Portland, Oregon on June 4, 2010. This is work that AFM musicians across the country need, and would earn were it not for displacement.

Or take the foreign act Teatro Lirico d'Europa, displacing AFM opera companies all across the country. These are just a few examples of displacement; there are dozens more. Here is a partial list of foreign acts which paid AFM visa processing fees from 2006–2007 (PDF). Most acts on this list are not highly regarded orchestras which are so artistically meritorious as to make any question of displacement moot. Some on the list travel under the name of a well regarded orchestra, but employ student or other cheaper musicians on their American tours.

What is the connection between MPF and visa processing fees?

Displacement. MPF was created to offset displacement of musicians in the recording industry. Today, we can save MPF by offsetting displacement of musicians by foreign musical acts. Resolution 17 preserves the core mission of MPF by offsetting displacement of AFM musicians, and gives it a new source of funding to do it.

Is Resolution 17 legal?

Trustee John Hall commissioned a law firm to prepare a thorough report (PDF), and it concluded that Resolution 17 is legal and could be implemented.

Would implementing Resolution 17 harm AFM's finances?

If we accept that foreign sweatshop orchestras unfairly displace AFM musicians, then it doesn't make sense for AFM to benefit from it, whatever effect it has on AFM's finances. However, implementing Resolution 17 would not harm AFM's finances, for the following reasons.

First, visa processing fees have only been collected since 2004. AFM was very recently completely solvent without this income.

Second, even with this income, AFM ran a deficit in 2009. An administration which could not keep AFM solvent even with the cash cow of visa processing fees, cannot now argue that it deserves it. The income from visa processing fees is dwarfed by AFM's enormous outlays on legal fees, traveling expenses, new hiring of front-office staff, and executive compensation — all of which the AFM now wants increased.

Astronomical expenditure on legal fees — over $1.9 million since 2007 — has enriched the AFM's law firm, but has been ruinous to the AFM. In the recording musician lawsuits, AFM has insisted upon expensive litigation instead of settlement or negotiation. A source close to the plaintiffs in the recording musician lawsuits noted that the plaintiffs would have been amenable to a settlement in which the 2% levy AFM sought was paid in part to MPF. The administration never explored this or any other opportunity for settlement.